tv Hearing on CMS Reinsurance Payments CSPAN April 15, 2016 9:10pm-9:26pm EDT
all right. we are reconvening this hearing of oversight investigation on unlawful reinsurance payments and now going to recognize the gentleman from oklahoma, mr. mullen, for five minutes. >> thank you, mr. chairman. thank you for being here today and thank you for hanging over as we had to run and vote. they don't seem to care about hearings. they just call votes whenever. anyway, look, there's a couple questions that i think is very important to us so we can get an understanding. one, if you could answer to the best you can, i understand that on march 21st, 2014, hhs issued a proposed rule for making payments that are required by
law under the reinsurance program. it's my understanding that this rule accurately reflects what was required by statute. the payments being made in three areas, one to the treasurer, insurance companies and to cover administration costs, is that correct? >> i believe so. >> you believe so? that's what the law is, right? >> yeah. >> then ten days later, hhs issued another proposed rule that completely changed what was proposed in the first rule. now the payments would go to the insurance companies and the treasurer would only get payments until a certain threshold was made for the insurance companies. is that correct? >> yes. >> can you explain why? >> so because the statute was silent on how to handle situations where either a lower amount -- >> what do you mean, silent? it specifically addressed the three issues. it doesn't speak, it's a statute. it's written. >> it's written to address the
estimated collection of $12 billion. what it doesn't address is what happens if a lower amount's collected or higher amount is collected which is why the agency felt the need to put out a public regulation. >> in the statute it specifically says that it's to go to the treasurer insurance company and cover administrative costs, not the insurance companies and then pay only after a certain threshold. that wasn't specified in it. is that correct? >> the rule specified how to handle -- >> no, no. the statute, not the rule. not what you guys issued. the statute. >> i'm speaking to the statute. >> you mentioned rule. go ahead. >> yes. so the statute speaks clearly to what happens if $12 billion is collected in the first year, again, this is before my time but what the agency needed to do was to put forward and they put forward for public comment two years ago -- >> has that public comment been
made public yet? >> yes. >> the opinions have been -- the response has been made back to the committee? >> yes. >> okay. >> yes. public comment on how to address situations like the one that arose where less than $12 billion was collected. >> what did the public comments suggest? >> public comments suggested that the policy of first taking care of reimbursing the claims of the insurers was the proper policy and was legally supported. >> by whom? because that wasn't the intent of the original statute and that's why i'm asking the question. we obviously don't support it going back to the insurance companies. it was -- its intention was to help pay down the debt. yet after the rule was issued, ten days later you reissued another rule stating basically what you guys felt needed to be done. >> and i understand that there's a difference of opinion, because -- >> it's not an opinion. it's a statute.
which is why when it is law, and when we have a question about it, and we want clarification in it and we ask the committee or we ask hhs for a response to it, we would like clarification. what we never get is clarification. >> we believe there's a statutory authority. that legal reasoning was put forward publicly. >> so if there was clarification that needed to be clarified, why wouldn't you come back to the committee and seek clarification on it? because the statute is a statute of what it was. so other than issuing a rule, then ten days later coming back and issuing another rule, why wouldn't you simply come back here? we feel like what happened is hhs decided to make -- ignore what the statute was, what the intent of congress was, and decided to make your own decisions. >> i don't think that's the case. >> well then how would you explain it? you never came back here and we were asking questions and clarifications. we weren't receiving those. >> this is two years ago. it was put forward for public comment for everyone, including the committee, to opine on the
very public reasoning -- >> it's my understanding when we asked for clarification there was none issued. >> i would have to go back and check on that. but that's not my recollection. i wasn't here but that's not what i have learned. >> we are still asking questions, we are here today trying to get the questions figured out. >> yes. we are doing our best to provide answers, including the legal and policy reasons. that's what i'm here today to answer. >> thank you. i yield back. >> gentleman yields back. i recognize the gentleman from texas, mr. flores, for five minutes. >> thank you, chairman. thank you, mr. slavitt, for joining us today. couple of preambles i wanted to share with you. i know you have heard a couple of these already before we get to the questions. the crs memo that we have talked about earlier today determined the statute, it is not ambiguous and that cms actions contradict the plain language of the law and then in february of 20 -- excuse me, february 2016, in
front of the health subcommittee of this committee, secretary birdwell was asked about the legal basis for diverting the funds and she provided no legal justification. so it seems to me like we are still struggling to find the legal justification under which the rules were -- under which the funds were diverted. i do have some fact-based questions to start with. the first one is how much money have you collected from the reinsurance program in 2014 from all the states? >> i can get back to you on the precise number. we have it here somewhere. >> i would assume you have got that number in preparation for this committee meeting since this is what we're talking about. >> it's $9.7 billion. >> 9.7? >> yes. >> okay. and for the treasury, you collected zero, i'm assuming? >> 2014. be that's correct. >> how much did you pay the insurance companies that year
for 2014? >> i think it's $8 billion. >> and the $1.7 billion difference, where did that go? >> that's still in a pool to be used against claims that come through the reinsurance pool. >> moving to 2015, how much did you collect for reinsurance? >> $6.5 billion. >> the law says it was supposed to be six. to the treasury you were supposed to collect two. i'm assuming that was zero? >> that will be $500 million to the treasury. >> you did give $500 million to treasury? >> we will. we will. >> you will or you did? >> we will. yes. >> okay. then what were the aggregate insurance company payments for that fiscal year? for that calendar year? >> they have not been made yet. >> no payments. so you're sitting on $6.5 billion from 2015 and $1.7
billion for 2016. what have you collected and what do you estimate full year collections to be? >> don't have an estimation yet. >> i'm sorry? >> i don't have an estimation yet. >> okay. what do you anticipate collecting for the treasury for this year? >> don't yet have an estimation. >> okay. i understand you made early payments. cms made early payments to insurance companies for 2016. what is that number? >> that was $2.7 billion. >> $2.7 billion for early payments to the insurance companies. okay. moving back to the underlying issue, cms [ inaudible ] between march 11 and march 21st as my colleague from oklahoma said a few minutes ago. in light of a crs memo which contradicts the position of cms with regard to compliance with the statute. will cms correct its rule back to the original interpretation of march 11th?
>> congressman, we still believe we have the statutory authority to issue the rule that was issued. >> okay. so you are not going to change back to the original -- >> we believe what we are following is supported by the statute. >> i disagree with you but there we are. so moving to the second question, self-insurance private -- self-insured private companies basically self-funded companies that are self-funding their employee health plans are contributing to the traditional reinsurance fund, even though they continue to cover employees and they haven't dropped employees from coverage, thereby forcing them to buy coverage on the exchange. in other words, they aren't contributing to the reinsurance issues or to the potential draw on insurance, reinsurance, and some of these companies have paid out huge sums over $50 million to bring into this program that ultimately aids insurance companies. how can we justify the payouts to insurance companies from these private companies who have maintained self-insured plans
for the benefit of their employees and they don't have any stake in the exchanges? how do we justify that? >> that's what the statute contemplated originally is my understanding. >> okay. so my question is, how do you justify the payouts to the insurance companies from the employers that have no stake in the exchanges? why did you change the formula and pay them more? >> again, this was all before my time. but that appears to be what the statute contemplated would pay. >> as an editorial comment, i used to be a ceo and i could not blame my predecessor. i could not say it was before my time when my board asked me a question. they wanted me to provide an answer, not to say well, that's before my time. just want you to know my opinion on that. thank you. i yield back. >> understood. thank you. >> i believe then that is all the questions we have from our members. so i want to thank you, mr. slavitt, for being here today.
i want to ask you one quick question. can we get a commitment from you that cms will provide documents pursuant to our march 23rd request in a timely manner? these are the ones regarding the reinsurance program? >> yes, mr. chairman. >> thank you. because what we have got so far, the publicly available documents. any idea when, could you please tell us when cms will produce these documents? >> we are working hard on it. do we have an exact date? we will follow up with your staff. as you know, we have scheduled on some other documents we are working for you so we can just put that right on the schedule and make sure we get you dates certain. >> we would like that. thank you very much. in conclusion, thank you so much for being with us today. i want to remind members they have ten business days to submit questions for the record and i ask mr. slavitt to respond promptly to those requests as well. with that, this hearing is adjourned.
and whether the freedom caucus will try to block the house republican budget. newsmakers sunday at 10:00 a.m. and 6:00 p.m. eastern. saturday april 30th is the white house correspondents dinner. c-span coverage begins at 6:00 p.m. eastern. the president will address the gathering as will larry wilmore, nightly show host. >> madam secretary, we proudly give 72 of our delegate votes to the next president of the united states. ♪
indiana university recently hosted a conference about america's role in the world. in one of the discussions from the gathering, former diplomats and intelligence and national security officials offered advice to the next president. this is an hour and a half. so we're here today to talk about whether the obama approach, call it a doctrine, call it a policy, of scaling back of retrenchment and a repositioning is one that the next president ought to change and reconsider or maybe even deepen. and we have the perfect panel to engage in this conversation.